Oireachtas Joint and Select Committees
Wednesday, 12 December 2018
Joint Oireachtas Committee on Housing, Planning and Local Government
Rebuilding Ireland: Minister for Housing, Planning and Local Government.
Apologies have been received from Senator Jennifer Murnane O'Connor, and Senator Grace O'Sullivan has had to leave to attend another meeting but she may be back. At request of the broadcasting and recording services, members and visitors in the Public Gallery are asked to ensure that for the duration of the meeting their mobile phones are switched off or turned to flight mode. It is not sufficient to put them on silent mode only as they still maintain a level of interference with the broadcasting system.
The purpose of the meeting is an update on Rebuilding Ireland, the action plan for housing. I welcome the Minister for Housing, Planning and Local Government, Deputy Eoghan Murphy, and his officials to the meeting. Before we begin, I draw the attention of witnesses to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given, and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.
Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable.
I invite the Minister to make his opening statement.
I thank the committee for affording me the opportunity to update it on progress made under the implementation of Rebuilding Ireland. I am joined today by Mr. John McCarthy, Secretary General, and assistant secretaries, Ms Maria Graham, Ms Mary Hurley and Mr. Paul Lemass.
Supporting families, individuals and citizens who are experiencing homelessness and whose lives are being affected by the housing challenges Ireland faces remains the key priority for this Government and for me as Minister for Housing, Planning and Local Government. It is vital that we continue to address and drive the supply of housing, and Rebuilding Ireland provides the framework for this. We continue to face a serious challenge to resolve the crisis of homelessness. The numbers remain far too high and, while there are some positive signs, tackling this issue will continue to be my main focus in 2019. Presentations of families to homeless services in Dublin have fallen for three consecutive months now, and of those presenting, greater numbers are being prevented from ever having to enter emergency accommodation. The Dublin Region Homeless Executive, DRHE, is allocating increased resources to outreach and prevention, and we will be working closely to accelerate this decrease.
Our delivery programme for social housing is of critical importance, but in parallel we are working to deliver a range of initiatives to support those individuals and families who are experiencing homelessness. As we work to deliver the solutions to provide homes for all of the households experiencing homelessness, my Department is working closely to deliver a range of emergency accommodation facilities to ensure that we have accommodation available for all. This includes the development of a range of family hub facilities, primarily in Dublin but also in a number of areas outside the capital. In September this year, I instructed the Dublin local authorities to deliver 180 emergency beds to ensure that we have sufficient beds to avoid anyone having to sleep on the streets, and we will now see the delivery of 203 permanent beds before Christmas in addition to 130 contingency beds for the cold weather period.
We know that individuals engaged in rough sleeping frequently require other supports to help them move from homelessness to an independent tenancy. While the short-term imperative may be to provide emergency beds, we are also committed to delivering longer-term solutions. The delivery of the national implementation plan for Housing First, which I launched with the Minister for Health, Deputy Harris, in September, is well under way. Tender competitions have been undertaken in Cork, Galway and Limerick in recent weeks for the delivery of the service in those areas. In Dublin, where rough sleeping is most acute, the recently issued tender for Housing First includes a target to deliver 125 new tenancies in 2019 and a total of 405 new tenancies in the period 2019 to 2021. Housing First will deliver long-term sustainable heath and housing solutions for some of our most vulnerable citizens. For families, experiencing homelessness, we want to ensure that each and every family is provided with safe and comfortable accommodation and that they are supported to identify and secure an independent tenancy, whether it be in a local authority allocated dwelling or a housing assistance payment, HAP, supported tenancy in the private rented sector.
Following on from the three summits held with local authority chief executives and the first housing body summit, all our efforts are clearly focused on driving delivery forward in a meaningful way. Working collaboratively is showing results.
To the end of quarter 3 of 2018, Rebuilding Ireland has delivered more than 63,500 housing solutions across all of our delivery streams. By the end of this year, I expect that number to have grown to approximately 70,000 and we are on course to achieve that. We committed to supporting 137,000 households into appropriate accommodation under build, acquisition, leasing, HAP and rental accommodation scheme, RAS, programmes over the six year period, and by the end of this year, we will have achieved more than 50% of our target. The Government is on track to deliver on the Rebuilding Ireland targets, and funding is in place to secure this delivery. To date, 17,315 homes have been delivered under build, acquisition and leasing schemes. The new build pipeline now in place is growing, as evidenced in the quarter 3 construction status report which has just been published. This report focuses on local authority and housing body new build projects across various programmes and demonstrates that the number of schemes and homes in the new build pipeline has more than doubled since the end of 2016, with 17,676 homes now built or progressing through the various stages of the construction or approval process. I am committed, as Minister, to increasing build activity at a faster pace, and with the latest construction status report showing nearly 5,000 homes on site and under construction and a further 2,652 homes at the final pre-construction stage, the delivery of our build targets is on track. As we know, build delivery tends to be end-year focused and, like last year, we will see over 50% of our build delivery come through by the end of the year.
As Minister, I have also been clear that we need to address issues of housing affordability, recognising the pressures that exist for low to middle-income households, particularly in Dublin. However, all local authorities are carrying out economic assessments of the requirement for affordable housing in their areas and the viability to deliver such affordable housing from their sites. In terms of affordable purchase, I have now commenced the relevant provisions of the Housing (Miscellaneous Provisions) Act 2009, the effect of which is to place the new scheme for affordable purchase on a statutory footing. I expect the associated regulations and guidance to issue to local authorities shortly. This is not delaying the necessary assessment or the development of proposals around land for the development of affordable housing.
Acknowledging that renters in Dublin and other urban centres are facing significant affordability challenges, I am committed to the introduction of a not-for-profit, cost rental sector in Ireland. Together with delivering more predictable rents, cost rental will make a sustainable impact on housing affordability. The Housing Agency, Dún Laoghaire-Rathdown County Council and a number of housing bodies are assessing the tenders for our first cost rental pilot at Enniskerry Road. I expect that project to be on site in the first quarter of 2019. In parallel, Dublin City Council, my Department and the National Development Finance Agency undertook more detailed modelling and financial appraisal on a major site at St. Michael’s estate in Inchicore, which Dublin City Council will now develop as a major cost rental project.
To support the affordable housing programmes of local authorities, the Government announced as part of budget 2019 the commitment of €310 million under the serviced sites fund over the three years 2019 to 2021. The funding is available for key facilitating infrastructure on public lands to support the provision of affordable homes to purchase or rent. I envisage a maximum amount of serviced sites funding of €50,000 per affordable home, and on this basis at least 6,200 affordable homes could be facilitated. I have now awarded funding of €43 million under the first call for proposals. The projects selected in this first call are in Dublin and Cork and will enable the delivery of 1,400 affordable homes on local authority lands as well as more than 700 social housing homes, where local authorities are bringing forward these sites as part of mixed tenure developments. There are also five projects that are still under active consideration, the total funding for which is €8 million, and which have the potential to deliver 230 affordable homes. These projects are in Fingal, Galway city, Kildare, Meath and Wicklow, and my Department is working with those local authorities to make these proposals happen. I expect the infrastructure works on the approved projects to begin as soon as possible, and a second call for proposals under the fund will be made shortly. The scope of that call will be influenced by the information received from local authorities as part of the aforementioned economic assessments.
In terms of furthering our ambition to maximise utilisation of vacant housing stock, my Department published the National Vacant Housing Reuse Strategy 2018-2021 in quarter 3. My Department is continuing to work with local authorities on their vacant homes action plans. This work is being supported by the vacant homes officers, funded by my Department, to co-ordinate local actions addressing vacancy and to provide a clearly signposted source of information for owners of vacant homes, including the funding options that are available, to assist in bringing vacant homes back into productive use.
On the rental sector, the Government has given its approval to the publication of the residential tenancies (amendment) Bill. The Bill provides a number of key measures and reforms designed to enhance enforcement powers for the Residential Tenancies Board, RTB, provide greater security of tenure for tenants, and further underpin the operation of the rent pressure zone arrangements, along with some further targeted priority measures. My Department is working closely with the RTB to ensure that adequate resources are provided to tackle any capacity constraints. The proposed new powers for the RTB are a crucial first step in expanding its overall role and function as part of a multi-annual change management programme to enforce tenancy law proactively within the rental sector.
The committee is aware of the proposals I recently announced to address, through amendments to planning legislation, the short-term tourism related letting of properties. I propose to regulate short-term letting through the existing exempted development regime by facilitating unlimited home sharing and the letting of a person’s entire home, for a maximum period of 90 days per year, without the need for planning permission. In addition, if a person wishes to let a second property that is not their principal private residence, they may only do so if they obtain planning permission. This approach will be underpinned by amendments to planning regulations and complementary amendments to primary planning legislation.
Last week, I also published, under section 28 of the Planning and Development Act, 2000, as amended, the urban development and building heights guidelines for planning authorities. These guidelines set out new and updated national planning policy on building heights relating to urban areas, elaborating on the strategic policy framework set out in Project Ireland 2040 and the national planning framework, and these are part of a suite of integrated measures and policy shifts to break the current patterns and development trends for our cities and towns and create more compact and integrated communities. I have said that we need to shift away from the business as usual development patterns and create a more adaptive and forward-looking vision. Our cities and our towns must grow upwards, not just outwards, if we are to meet the many challenges ahead. Along with the apartment guidelines published earlier this year, these height guidelines represent the final reforms to our planning guidelines for apartment development, which continue to increase at pace.
I thank the committee for its engagement with me and my Department to date, and I look forward to continuing our very important work in 2019. Members can be assured that we at the Department are all committed to addressing homelessness, accelerating housing delivery, tackling vacancy, as well as ensuring the reform of the rental sector.
I thank the Minister. We agreed in private session that we would do ten-minute sessions to question the Minister. It is up to members how they use that time, because if they use the whole ten minutes to speak without going to the Minister, then he will not have the opportunity to come back in. I will indicate when five minutes have elapsed and it is to be hoped we will get a few sessions. I ask members to indicate which pillar they are asking the question on.
I thank the Minister, his Secretary General, Mr. McCarthy, and his senior staff for coming in because it is an important engagement. I want to stay focused because we are here today as a joint committee to discuss and examine the progress on the Rebuilding Ireland document. They are not aspirations or other issues that stray off, so I will keep my attention focused on this document. I said at the very outset, when the then Minister, Deputy Coveney, came in, that it is a brave politician who sets out targets that are there to be tracked and traced to hold the Minister to account and it happened two and a half years ago. The Minister is his successor and I know that he is happy to be held to account and he acknowledged the importance and the role of this committee as a statutory Oireachtas committee dealing with and effectively shadowing his Department. Again, I thank the Minister, the senior management team and the Secretary General in the Department. I have always found them to be very professional and helpful and I am conscious that they, too, need support.
I initially came in here to say that councils need support but the Department needs support and the Minister's staff need more support. That is my experience of the task at hand. Sometimes when a person is at the very centre of power and decision making, especially at the level that the Minister is at in the Department, he or she might not be conscious of the needs within his or her Department. That is not to say that the Minister is ignoring them but he is not conscious of them because he is a busy politician like most. I want to put that down as a marker because that needs to be looked at again and additional resources are needed to meet the challenges and to support the local authorities.
I am not expecting the Minister to come back with a very detailed answer to my questions now but maybe he will give a commitment to follow up on them with a written response or an email to the committee if he cannot deal with them all now. I will kick off by mentioning the Shanganagh site. I am sick to the teeth of hearing about Shanganagh Castle and the site, who will own it and who is to blame. I hear stories from local people in Dún Laoghaire that it is a matter for the Department and there is total frustration with the process. I hear another story from the elected members which is another angle on it and I hear about another problem from the people who live out in Shankill. In fairness, the Minister agreed with Deputy Boyd Barrett, whom I welcome, some months ago to have a round-table meeting with the stakeholders on this. There is so much misinformation out there that it is about time that the Oireachtas Members for that constituency, the county council members, the Minister's senior management team and the chief executive of Dún Laoghaire-Rathdown County Council came together at one table and heard the actual story. There are too many different stories and they are not joining up. There is a general frustration because there is the potential for 500 houses and that place is in State ownership. I was talking about it to Senator McDowell, the then Minister for Justice, Equality and Law Reform who sanctioned the sale of the whole thing. I just wanted to flag that as an issue.
The Minister talked about Enniskerry Road and I would like an update on that.
People have said to me that if it had been left to the local authority years ago, it would have built the houses by now. There is not a house on the Enniskerry Road and I want to examine the issue.
I would like the Minister to provide an update on the Land Development Agency. We are still not aware of the timeframe for the underlying legislation. Will the Minister clarify the position?
I wish to raise the subject of An Bord Pleanála and online issues. In the context of Rebuilding Ireland, we talked about how people could engage. We talked about fast-tracking the An Bord Pleanála process. New management structures are in place there but we need the process to sharpen up and be faster. I am conscious that the Minister has to keep a certain distance from An Bord Pleanála. There is reference in Rebuilding Ireland to online engagement in the planning process, but that is not happening. People are frustrated by the process. Major reform is required.
I have some key questions for the Minister as well as some general comments. What process and checks does the Department use to display and update its data in terms of Rebuilding Ireland, specifically in terms of publication and the internal purposes of that? Are tables updated continually, for example, weekly or monthly? Sometimes I get a sense that information is gathered because the Minister is in the Dáil, for example, responding to parliamentary questions or he is coming before the committee and he gathers another load of information. I appreciate that he is a busy person. I am not here to attack the Minister but I am interested in hearing about the ongoing and continual monitoring of Rebuilding Ireland.
Pillar 1 addresses homelessness. Why has action 1.30 switched from "progress" to "ongoing"? How much progress has been made under the rapid delivery framework? Actions 1.34, 1.35 and 1.36 continue to remain categorised as "ongoing". What level of progress, if any, has been made in regard to these proposals?
Under Pillar 2, action 2.15 relates to the establishment of a regulator for the approved housing body, AHB, sector. That is overdue. Will the Minister report on progress and his intention in this regard?
Action 2.20 relates to supports for people leaving HSE accommodation and mental health services. The project was to be rolled out between 2018 and 2020. Will the Minister provide an update on how many tenancies have been created to date for those transitioning from mental health facilities to community-based living, as of today? I will come back with more questions later if there is time.
In his opening comments Senator Boyhan talked about the importance of having targets. I agree with that because targets bring transparency and provide for accountability. Targets also help us drive delivery, although we do not always reach those targets, but they will also show us what is working and what is not, so it is important that we have them and work to them.
Regarding the support of my Department, I am well aware of the needs of my Department. Some reconfiguration has happened recently in terms of bringing in additional staff at assistant secretary level to help reorganise some functions and help us drive additional aspects of Rebuilding Ireland more quickly. There are many stakeholders involved, not just the Department of Housing, Planning and Local Government. There is also the Department of Public Expenditure and Reform, the Department of Finance and a number of agencies such as the Housing Agency, the Housing Finance Agency, and the National Development Finance Agency, NDFA, which is important in terms of some of the issues to which I will refer concerning Shanganagh. Work has been continuing in Shanganagh. It is not as if nothing has been happening. We have been trying, between the NDFA and the county council, to get the financial model right so that it works when we do it. The worst thing to do would be to have got the numbers wrong. The financial modelling is complex when one is trying to develop a site like the one in question. A delivery board is now in place. I would have no problem with the committee meeting the delivery board to hear about its plan and how quickly it wants to see it happen. We have staff out there today meeting relevant officials to discuss the project. We continue to work on the project. Last week I had a meeting with the vice president of the European Investment Bank to talk about wider ambition concerning the delivery of affordable housing that we want to drive. I understand that in January or February of next year the Enniskerry Road project tender will be awarded as the process is nearing completion.
The heads of the Bill for the Land Development Agency are ready and I want to bring them to the Cabinet. We have one more Cabinet meeting before the end of the calendar year and it is my intention to bring the Bill to the Cabinet if we can finalise the heads. I am also going to announce the interim board at that point, but that depends on being able to get that item onto the agenda of the meeting. It is a busy time of year to try to get something on the agenda. We will continue to work full steam ahead with the Land Development Agency. It is up and running already as a body, just not under statutory legislation. We have money that we can now appropriate to it this year, thanks to the Supplementary Estimate that was agreed last night. The agency is almost ready to submit planning permission on some of the first sites. The agency is working and it is going well given that it was only established a couple of months ago, but the legislation is important in terms of it being able to capitalise further projects over the course of next year.
An Bord Pleanála is independent. A new chairperson was recently appointed who has come from the Department, so that person is well aware of what we want to achieve under Rebuilding Ireland and the task at hand. Additional board members above the usual number have been appointed. New staff have been appointed to the new delivery team. When it comes to the multi-unit developments, those that comprise more than 100 homes and more than 200 student spaces, the agency has met its timelines in 100% of cases. Thousands of homes have been approved in the past year under the new fast-track delivery. The system is going well. While I have not spoken to the new chair in detail about the e-planning programme, I spoke to the outgoing chair about it in terms of the progress that had been made and the further work that is under way to its ICT system. An Bord Pleanála has seen its workload increase significantly in recent years and, as a result, we have given it additional resources and funding and we will continue to do so.
In terms of data published by the Department, it depends on the data. We monitor certain things on an ongoing basis and we produce monthly information, for example, on planning permissions. Other data will emerge at other intervals. It depends on where we collect information, for example, whether we are collecting it from local authorities directly or regional leads who are collecting it from local authorities. There is a statistician in the Department and an entire section which does that work. Data go to various levels of management to be checked and verified. Most information is then published. As Minister, I will take a look and, if I have questions, I will query some of the data as to whether I think they make sense or if something adds up. Data go through a number of checks and balances in that regard. Other data are published separate to us which we always look at to see how they compare with data produced by us or one of our agencies. We examine whether they confirm a trend or question a trend. A considerable amount of work goes into data and we constantly try to improve our data collection methods. We are examining ways of improving data collection when it comes to those in emergency accommodation. I asked the Central Statistics Office, CSO, to take on board the responsibility for counting the number of completions, and since then we have that information, which is much better than relying solely on extrapolations from ESB connection data. I understand the need to improve our data constantly and make sure that the data we publish help inform the public debate and what needs to be done.
Senator Boyhan asked specific questions about the various pillars and whether the table is updated. I have information on approved housing body regulation. We have information on the voluntary bodies, which is being led by the Housing Agency, in terms of getting housing bodies involved in the voluntary level of regulation, but we are moving to statutory regulation. We are drafting a priority Bill which will not make it onto the Statute Book this year but we expect it to be introduced early next year. We will continue to work with housing bodies to help the smaller ones in particular. Tier 1 housing bodies are smaller organisations or volunteers and we want to get them in line with the voluntary regulation before we move to full statutory regulation. Classification is an issue that is being led by the Department of Finance. We are treating that as an accountancy issue that will not impact on our delivery from housing bodies.
Senator Boyhan also asked about rapid delivery under the first pillar. Under action 1.30, Dublin City Council put a framework in place for volumetric build apartments. That has been in the newspapers and we hope to publish it before the end of the year. The council has been working to do that. Once we have the framework, we can run mini competitions from that in each local authority to start building rapid delivery upwards housing.
Another action under that pillar concerns modular clusters. We are progressing well with that. Three sites have been identified for modular clusters. That framework will be in place by the end of the year. Galway and Louth are already advancing on those sites.
I will have to come back to the Senator on the number of people transitioning from mental health accommodation as I do not have that information to hand.
I thank the Minister for his opening statement. Before I ask my questions, I want to acknowledge the significant amount of work done by the departmental officials in terms of their preparation of the reports for today's meeting, particularly the pipeline and progress reports which are very detailed pieces of work.
I have a series of questions on each of the pillars. We are almost half way through the lifespan of Rebuilding Ireland. Essentially, we are two and a half years into a five year plan. The spend on emergency accommodation has increased from €70 million per annum to, following last night's Supplementary Estimate, €176 million per annum, which is a 193% increase. I am not arguing against the provision of emergency accommodation and better quality emergency accommodation but I am concerned that half way into this plan, on which the Government continually tells us very significant amounts of money are being spent and progress is being made, the spend on emergency accommodation is increasing dramatically. At what point in the lifespan of Rebuilding Ireland will the spend on emergency accommodation start to fall, which would be a key indicator of things beginning to improve at the rough end?
On the modular hubs, again, I am not against better quality emergency accommodation for families than hotel rooms and bed and breakfasts but following on from the responses I received to two parliamentary questions I am concerned about this project, albeit we have only limited information on it. In both responses, the Minister, Deputy Eoghan Murphy, said there could be a dispensation from or a relaxation of building regulations for these modular hubs. Will the Minister set out explicitly how a dispensation from or a relaxation of building regulations could happen? I was not one of the people who attacked the idea of modular housing when it was first proposed because I understand that such housing can be good quality housing if it meets all of the building regulations. I am worried, however, that with these modular hubs we are putting in place accommodation that is much closer to the public perception of modular, which is prefabricated or Mosney type accommodation. I would appreciate if the Minister could elaborate on the quality of those builds.
On pillar 2, social housing, what are the totals for quarter 3 build, acquisition-lease, HAP and RAS, which is not included in the report, although I appreciate it was finalised only last night? When the Minister has given me that information, I will follow up with a supplementary question on where we are at with the targets. There has been a significant fall-off on the leasing target and the Minister is trying to match this with increases in acquisitions but I do not see how the numbers and funding match. Perhaps the Minister would provide reassurance in that regard.
In regard to the pipeline report, could Traveller specific accommodation be included? I acknowledge that the Minister gave me a positive response to a parliamentary question in which he said this proposal would be considered but the committee would like to know the progress of Traveller specific social housing. There is no reason that information should not be included in this report as there is not a huge number of such projects out there.
On pillar 3, private housing, I have no objection to densification. It is one of the aspects of the national planning framework of which I am broadly supportive. I have two specific questions with respect to the report, and the new guidelines, with which the Minister provided us today. In producing the report and the planning requirements therein, was an impact assessment undertaken of land values in urban centres as a result of increasing heights? We know, for example, that as heights are increased profitability from inner city sites increase and this has an inflationary impact on land values. Was that examined? There are people who argue that there is a tipping point between height and density such that as heights increase density increases but that on reaching a particular height there is no significant gain in density because of the need for more surrounding space etc. Was a specific study done to identify the tipping point in terms of height and density and what height provides maximum density, particularly in areas such as inside of the canals in Dublin?
I note there has been no housing commencement data published since August, either by the Department or by the CSO. Will the Minister explain the reason for that? For example, is it that the data have not been uploaded and, if so, when we will the data for new builds of public and private sector housing be published? On the rental sector, the Minister is aware that Sinn Féin has been broadly supportive of his intention to provide the Residential Tenancies Board, RTB, with new powers. As discussed earlier in private session, the relevant legislation needs to be progressed quickly in the new year. I am concerned about the preference for criminal sanctions over civil sanctions simply because it would mean the RTB would have to take cases to court and that would be expensive and time consuming. Will the Minister clarify if it is the intention to make those criminal rather than civil and, if so, explain why?
My final question is on the right to housing, which was a matter of public debate in the President's speech this week and at launch of the Simon Community's annual report yesterday. At the constitutional convention, 84% were in favour of a constitutional right to housing. The programme for Government includes a commitment to examine it but that task has been removed from this committee and given to the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach, which has yet to do it. As I said, the issue was mentioned in the President's speech earlier this week. In the Irish Human Rights and Equality Commission's research by Amárach, 63% support a constitutional right to housing. Has the Government set its face against this or is it willing to consider it and how can we have a discussion about it?
I thank Deputy Ó Broin for his questions and for acknowledging the huge amount of work done by the officials. It is always appreciated when they are acknowledged for the hard work they do. They give this committee a lot of time and they are happy to do so.
As the Deputy said, we are roughly half way through Rebuilding Ireland. While the spend on emergency accommodation has increased, not all of it is spent on the provision of emergency accommodation. A lot of that spend is on prevention as well. That does not mean there is not an issue in terms of people needing to have supports coming from Government and local authorities. It is not the only measure of the success of the plan. Looked at in isolation, it tells only one story. The additional spend for the delivery of new homes is another way of measuring the success of the plan, as are other measures such as planning permissions, commencement notices and so on. As always what is important is not how much we spend but how we spend it. In terms of Rebuilding Ireland, we know that in 2020 and 2021 we will be spending more money getting people into the stock of social housing that we will have. HAP will always exist. There will be always people who want to avail of it but we will be spending our money in a better and more efficient way when we are spending on increasing the stock rather than the amount we are spending now on HAP. That will happen over the course of the plan in terms of a reprogramming of money.
On modular hubs, what is important is that we can provide people with quality accommodation that is temporary. We are building amazing homes. In all of the new housing schemes that have opened recently, the quality of housing is fantastic, as it should be. Emergency accommodation also has to be of the highest standard possible. These modular clusters are different. We do not yet have them in Ireland but they have worked successfully in the UK. We want to progress them here. In regard to standards, we regularly hear that there is too much red tape and the standards are too high and so on. What we are seeking to do is in line with the successful projects in the UK, in particular a development in Scotland which comprises approximately 40 modular homes. The type of regulations needed are different from those which apply in respect of an apartment building because it comprises multi-units or in respect of stackable rapids in a volumetric scheme. I have a more detailed note which I can supply to the Deputy in regard to the changes that have been made. Everything is being done in terms of ensuring that minimum standards are not breached, in respect of heating and fire regulations and the security and safety of the building in terms of its structural integrity. This is not about half measures. Rather, it is about making sure we are not gold plating what needs to be done in terms of what has been successful in other countries.
On the social housing targets, the breakdown for quarter 3, as per the published report, is: new build, 1,764; voids, 605; acquisitions, 1,661; leasing, 476; HAP, 13,741 and RAS, 534.
We talked about leasing in the committee yesterday evening. With regard to our targets for leasing and what we wanted to achieve in the first year, it was working well. When we look at what has been delivered and what might be delivered under enhanced leasing, it is not delivering what we thought it would. We have sought expressions of interest on enhanced leasing twice. We have to look at it now to see what other changes need to be made to deliver more quickly. I think I know where a couple of the sticking points are but they are ones that cannot be resolved on our own in the Department. I have asked the Minister of State, Deputy English, to engage with the Department of Public Expenditure and Reform to see if further changes can be made to the enhanced leasing programme. There was considerable interest in these programmes but some of the interested parties did not have all of the requirements. There were also other concerns raised about things on our side. The Minister of State, Deputy English, will examine them with the Department of Public Expenditure and Reform because we have to deliver a certain number of homes through leasing.
As a result of leasing not hitting the targets we wanted it to hit, as we discussed yesterday evening, we have had to do more with acquisitions. We have done more with acquisitions because we could get the money to do it. It is still value for money in certain local authorities outside of Dublin. Housing bodies are pursuing acquisitions because they make sense for their own programmes. There have been some bank acquisitions we have been able to get our hands on which has been a good thing.
With regard to the pipeline report and Traveller-specific accommodation, we are looking at it. We allocate funding and we have the policies. It is a priority. One of the difficulties we have is getting planning permission and local objection when it comes to Traveller accommodation. The committee needs to have a conversation about the role of elected representatives when it comes to objecting to planning permissions because it is still happening. Citizens will always have the right to object, whether on spurious grounds or not. We might see more of it now as the local elections come closer. Some candidates might seem to be acting in the interest of the local community - they are not - by supporting local residents' objections to new housing whether social housing, Traveller-specific accommodation or private housing because that is also happening. It speaks to a bigger problem we have with people who are fortunate to be living in an area and who own a home. We need to provide more homes.
We need to increase the densification of our urban centres. That is just a fact. In many parts, which are very close to very expensive infrastructure such as transport infrastructure or schools, densities are not being used efficiently. That means building up. To come to the latter part of the Deputy's question, height is not necessarily a way of achieving density. Anyone who has helped to design a city or county development plan, as I have, knows density is achieved in many other ways. That is why the first thing we did when it came to looking at apartment guidelines was to look at density, the number of units per core, car-parking provision and the aspect ratio, which are all things that would help to provide more apartments on a site. Height helps. We saw it on a previous piece of work we did. When it gets to a six-storey shoulder height, for which the guidelines now provide, it absolutely helps in terms of density. They are trying to make a six-storey shoulder height the default position in our urban cores. As we go beyond that, the height densification question becomes one of diminishing returns but it allows us to have things like mixed use which we need to see. We can have other uses that are not just about people living in the building but also about people working there or using it for other types of community and sporting facilities. In terms of liveability, height allows us to do more on a particular site than increase densification and provide more apartments.
I thank the Minister for his presentation. Some of the questions have been asked. I will return to the last point on housing delivery figures for this year. When they are broken down, about 4,506 are through new builds, voids, acquisitions and leasing and 14,275 are through HAP and, to a lesser degree, RAS. The Minister stated that by 2020 there would be more provided through builds than through short-term housing measures. One issue I have raised consistently is my concern about our over-reliance on the private rental market, particularly HAP. When does the Minister see the tipping point happening? When does he see it equalising based on his plans in Rebuilding Ireland? Two-thirds of people who deemed their housing needs were met this year did so as a result of housing assistance payment. Many of them are relatively short-term leases of 12 months. The Minister states on a regular basis in the committee that it suits many people. It is not the evidence I have from the people I meet. HAP does not provide a home. For many people it is not a long-term solution. I continue to be very concerned about the over-reliance on it. Will the Minister give me a projection of the HAP spend in 2019? We had to provide additional funds in this year's budget. I am interested to see how the Minister sees us catching up on the capital side and more people being housed permanently. It is a concern I have.
I want to return to the service site fund and the €310 million for delivery of affordable homes which is something the Minister and I discussed and negotiated as part of the budget. The Minister did not read into the record the part of his statement that stated he expects the associated regulations and guidance to issue to local authorities shortly. It is in the Minister's written statement. When does the Minister feel we will have the criteria published for an affordable housing scheme? It was a major priority for Fianna Fáil in the budget negotiations. Local authorities, including mine, are engaging with it on the delivery of affordable homes for working people on State-owned land. I wholeheartedly support it but I want a timeframe. It means real delivery. About 6,200 homes can be delivered under it. When we start rolling it out, it can and should be expanded further. We have to look at doing that. Can the Minister give me a timeframe for the publication of regulations? It will be greatly appreciated.
The Minister mentioned the Land Development Agency and that he was bringing the heads of the Bill to Cabinet. When does the Minister see the Bill coming to the House to debate the workings of the Land Development Agency?
That brings me to two other questions about pending legislation. Deputy Ó Broin alluded to it. Both Deputy Ó Broin and I have engaged extensively with the Minister on the residential tenancies (amendment) Bill, which we are hoping to see strengthen the rights of students in student accommodation and provide for enhanced powers for the Residential Tenancies Board. The Minister's statement - I mean this respectfully - is something he could have delivered to us a couple of months ago. What is the delay with bringing forward the Bill? Is there a disagreement on the potential criminal or civil penalties? My party and I are of the view we should move towards civil penalties. The issue with the RTB is the issue of bringing enforcement orders to court. It is not required in many instances. I would like an update on when the Minister intends to bring forward that. Fianna Fáil, Sinn Féin and others have legislation. We held back on it - we published it - on the basis this Bill would be brought forward and that the Minister would include some of it in the residential tenancies (amendment) Bill.
The Minister mentioned short-term letting. We know what the Minister has said so far about dealing with short-term letting and regulations. When will we see this brought forward so we can get it implemented? The residential tenancies (amendment) Bill is very important. The Department is doing a review of the Rebuilding Ireland affordable loans. I asked about this at committee previously. The review is on the basis of the standardisation of criteria for financial underwriting. There have been differences between local authorities. At what stage is that review? Have we standardised the financial underwriting criteria? What is required for the applications? Will the Minister give me an update on the loan approval rate? We had a refusal rate of about two-thirds which was reduced to 50%, so one in two were being refused. What is the position now? What is the level of drawdown?
The repair and lease scheme was not mentioned in the Minister's statement. To be fair, I know the Minister cannot mention everything.
I will conclude with two very quick questions.
Administrative changes were made to the repair and lease scheme in February 2018. Have those changes made a difference? Has there been an increase in the number of properties being made available via the scheme? It is very good as a concept, but I hope we are not strangling ourselves with regulation.
Has the Minister an update in regard to the EUROSTAT classification of approved housing bodies, AHBs, as being on balance sheet and the impact of that on the ability of AHBs to deliver social housing units? He mentioned that he met representatives of the European Investment Bank. Housing delivery through approved housing bodies is a major part of Government strategy and will be a part of the solution to the housing crisis but, obviously, the on-balance-sheet issue may stymie further delivery in that sector.
Has the Government given up on rapid build units? Delivery in that regard was far below the target set for last year and is similarly off target so far this year. Has the rapid-build-unit idea been shelved or is it being revised within the Department?
The committee was provided with a report detailing the number of people successfully in HAP accommodation. We have tenanted at least 40,000 through the HAP programme and it is working for those people. We are not seeing an abnormal number of people exiting HAP as a result of the tenancy breaking down compared to what is the case in the traditional private rental market. HAP is not having the impacts which some people claim it is. There are individual cases involving people who find themselves in difficulty with which Deputies, as local representatives, must deal, but that does not mean the programme is not working.
We see HAP as meeting the housing need of those people because they are able to stay in that accommodation and continue to work or increase their hours of work. If the lease is discontinued for whatever reason, the person can move to another accommodation and still avail of HAP support. Approximately 1,500 people exited HAP via the transfer list into the permanent stock of social housing, while up to 2,000 people exited HAP because they no longer required it due to a change in their circumstances, which is very welcome. More than 40,000 HAP tenancies have been created.
We will spend €422 million next year on HAP. That will support those currently in HAP tenancies and fund the creation of new HAP tenancies. As I stated, we will reach a tipping point in 2020 and 2021, which is the final year of Rebuilding Ireland. By that time, the building of social housing by local authorities and housing bodies will have recovered sufficiently such that people will be primarily supported through our stock of social housing. There is a funding commitment under the national development plan to continue that to 2027, with a projected 110,000 social housing homes to be built between now and 2027.
We will publish the criteria for the serviced sites fund next week. That work is almost complete. I hope to publish it next week before the Dáil rises. The basic qualifying criterion is an income of less than €75,000 for a couple or €50,000 for an individual. The documentation provided to the committee contains a table listing the sites that have been agreed in principle and another detailing the sites we are working to get agreed in principle. We will run the serviced sites fund in a similar manner to the urban regeneration fund, involving A, B and C streams. The A stream involves sites that are ready to go, the B stream regards sites that need more work and the C stream pertains to sites that were not successful but which we want to quickly progress into the B stream. Each local authority has been asked to carry out an economic assessment of its area to determine how it will deliver affordable homes on its public land. The results of those assessments will inform our second call which will go out in the new year.
I want the Bill to provide a legislative basis for the Land Development Agency, LDA, to pass through the Houses by Easter because I want to get extra capital into the LDA as quickly as possible. If I publish the heads of the Bill next week, the committee will then need to carry out pre-legislative scrutiny. I hope to appoint a board to the agency as quickly as possible in order that it can begin to take certain steps in terms of accounts and the hiring of additional staff and so on. It is already working. It aims to begin lodging its first planning applications next year and I do not want to do anything to delay that. The agency is up and running but it is important it has a legislative basis.
On the residential tenancies (amendment) Bill, I will firstly address student accommodation. Student accommodation let under a tenancy agreement is currently covered. As Deputy Darragh O'Brien is aware from his discussions with Deputy Ó Broin, the Minister of State, Deputy Mitchell O'Connor, and me, the aim is to ensure purpose-built student accommodation under a licence or other student accommodation that might be under a licence from a public body is also captured. We are trying to compile the evidence and information and ensure the proposal in that regard is robust. The information I published yesterday, of which members are aware, will form the basis of an amendment which will be tabled on Committee Stage of the Bill. Work remains to be done in that regard but we have time to do so because, obviously, the measures will not be retrospective but, rather, will apply into the future.
On the delay to the residential tenancies (amendment) Bill, I wanted to ensure the extra powers being given to the Residential Tenancies Board, RTB, are robust rather than symbolic. There was a significant amount of discussion between myself and the Office of the Attorney General to ensure the RTB would be able to have powers similar to those in a European model while recognising that we do not have a European legal system in Ireland but, rather, a common law jurisdiction. It is sometimes difficult to find that balance. Certain matters will be liable to be treated as a criminal offence or may instead be pursued by means of administrative sanction. That relates to a question asked by Deputy Ó Broin. It will be for the RTB to decide whether the breach of the rent pressure zone regulation is sufficiently serious as to warrant a criminal prosecution and possible prison sentence or ought to be dealt with using the new administrative powers of the RTB to issue a fine, warning, caution or similar. We have provided two streams which the RTB may follow. Should the RTB wish to pursue a case as a criminal offence, it will be able to do so or, alternatively, may deal with it using its administrative powers, such as imposing a fine.
This is the first of two rent Bills. We have tried to bring forward in the first rent Bill measures on which all Deputies and Senators can agree such that it can pass through the Houses quickly. I hope Oireachtas Members do not table amendments dealing with other possibly more complex areas which can be covered in a further Bill. We need to get this Bill enacted quickly because these are important powers that will protect people. I hope now that the Bill is published, it will be prioritised in the Oireachtas schedule by the Business Committee in order that we can hit the ground running in January and get it through the House quickly. However, I am in the hands of the Oireachtas in terms of how long it will take for the Bill to pass.
The draft guidelines on short-term letting have been given to the committee. The required changes to primary legislation are very simple and can happen very quickly. However, the House may approve or reject the regulations I lay before it but it may not amend them. We have provided draft regulations to the committee in the hope that it can test them along with departmental officials. If the regulations are approved following the two-week waiting time after I submit them, they will become law. We have until 1 June to get this done but we should not wait until the last minute. The committee and the Oireachtas should be resolute that this change is coming on 1 June, that nothing will stop it and that people should be prepared for it. We do not want people to come forward on 1 June to say they were not ready for the changes because the law had not been passed. This law will be passed before then.
However, as there are many issues to which the Minister has not had time to respond, once the first round is completed I will allow him ten minutes to follow up on questions which he has not addressed. Deputy O'Dowd is next but he is allowing Deputy Barry to speak first.
I will take five minutes at most. I welcome the Minister. I welcome the significant increase in the number of houses, start-ups and so on in my constituency. That very visible increase is a reflection on the Minister, the Department and, obviously, the more focused thinking that has been employed. However, I ask the Minister to address certain areas that require further consideration. Much of our towns is no longer needed as retail space because of a change in retail patterns such as people buying online and so on. Some retail units in Drogheda and, I am sure, elsewhere in the country will no longer be used as such. Is there a plan to analyse that obvious shift in usage and to fast-track change of use?
While planning permission is now much easier to get, it would drive through that development if officers were appointed in councils. It could be part of the role of the empty homes officer to look at these properties which are vacant and derelict as well as at properties on brown field sites which are derelict and past use. It could be an important focus to provide increased accommodation as the services are in place. One has the water, sewerage, footpaths, lighting and everything else.
I raise also matters relating to Louth. I keep raising the following point. There has been positive CPO progress there. However, while other local authorities are doing it too, they are not all working at the pace they should be. How can the Minister increase the pressure on local authorities which are not doing their jobs to ensure they step up to the mark and do the business? The following is an important point. Louth County Council has a huge debt. It incurred €20 million or €30 million in debt in buying land at the height of the boom and is now faced with servicing that debt at a crippling cost. Is there a possibility the Minister might be able to aggregate those loans to take some of the burden off local authorities like Louth County Council so that they can focus on providing more homes and refurbishing existing ones? It should be a condition of doing so that the authorities would have to commit to using the funding released as a result to provide housing.
Perhaps the most important point I will make today is that in the past few weeks approximately 15 local authority tenants had their gas boilers fail but the county council does not have the funding to replace them. When one visits a family of four or five including children with disabilities and people who are sick and unwell in their homes who cannot light the fire and have no heat, it is not good enough. The local authority can do ordinary repairs but the cost of replacing a boiler in full is a serious problem. It is hugely important to ensure that any family or person who pays the rent and is a good tenant is not left in that appalling situation. Week after week, they are told they have top priority but the authority does not have the funds. It will have the funds in the turnover of the new year, but they need them now. Can the Minister look at that? There are also some older people who were corporation tenants and who cannot replace their boilers. I do not know if anyone else has that problem, but it is a very serious one for many families and we must find a way to assist them.
I welcome the Minister's proposal to introduce sanctions for people who do not meet their requirements under residential tenancies legislation. Criminal sanctions are an absolute deterrent. If one knows for sure that one will be hit on the head with a very significant fine, one will not break the law. The small number of landlords in this category would instead ensure they treated their tenants in accordance with the law.
I support a constitutional right to housing. It is a good idea. What one has to do is balance the measure to impose a duty on local authorities under such a constitutional amendment to act reasonably and with due consideration for the needs of the individual. That is how the Constitution would be interpreted. It would not mean that everybody would get a house just because he or she wanted one; it would mean that housing needs would have to be met proportionately, in good time and in a fair way. Some people are not having their needs met but I welcome the progress being made. I thank the Chair.
I thank Deputy O'Dowd for sharing the time. The only issue with which I want to deal is affordable housing and what housing will cost under the affordable scheme. A lot of people are interested in hearing the answer to that question. I note the Minister has informed the committee that he intends to publish next week the criteria for the affordable housing arrangements. People will be watching very carefully to see what is announced there. I look at the section of the speech dealing with affordable housing and a key line in it is the statement that there will be serviced sites funding of €50,000 per affordable home and that on this basis at least 6,200 affordable homes could be facilitated. I look at the figure of €50,000 and I see that the average market price of a home in Dublin is approximately €380,000. If one takes €50,000 away from that, one comes to €330,000 which is well beyond the means of a young person out of university who has worked for a couple of years or even of many workers on the average wage. However, I am keen to tease out how the €50,000 will work because the speech said the funding was available to facilitate infrastructure and to support the provision to purchase or rent. Am I correct to say that means it is not a straightforward situation of a market price minus €50,000? Rather, the €50,000 will go on infrastructure and contribute to a lower price in a different way. Can the Minister clarify that? To get down to brass tacks, which is what people watching will be interested in, I take the examples of Dublin and Cork, our two largest cities. Under the terms of the affordable housing arrangements the Minister intends to publish next week, what will it mean in practical terms for a working couple on the average wage for the price of a house in Dublin or Cork? What will be knocked off the extraordinarily high and unaffordable market rates that exist now? Sin é.
I thank the Deputies for their questions. Deputy O'Dowd referred to the changing nature of our towns and villages and he is absolutely right about how we need to rethink that whole area. That is why in talking about rebuilding our housing sector, we are not talking about recreating what was there before. We need to build a new one. That means more people living in towns and centres and a greater commitment to compact growth, which we have through Project Ireland 2040 and Rebuilding Ireland. We changed the regulations to allow people to convert accommodation above shops into as many as nine homes - no more - without the need for planning permission. That also applies at ground level. A consultation was done on this, which has concluded, and a document will be published shortly to give people greater guidance on doing that.
The repair and lease scheme has been one thing we have tried to pursue to get derelict buildings in town centres back into use. In our urban fund, which was launched recently, approximately 27% of the first round of €100 million was used for those integrated projects to bring about living in town and village centres again. We have a process under way to CPO properties to sell back into private ownership. A couple of pilots are being looked at around that. Certain villages or towns are not going to have the retail focused high streets they had in the past due to the way the economy has changed. As such, there are properties which could and should be used for housing because the infrastructure is already in place and due to the benefits that come from that kind of community living.
On CPOs more generally, our vacancy teams are in place. Vacancy rates are not as high as previously thought and we have much better information now thanks to the recent Indecon report. However, our local authority teams are identifying vacant units and we have a number of pilots under way in six local authorities. They are now starting to drill down into what is actually vacant as opposed to what appears to be vacant. We want them to move towards CPOs on those properties or to at least get into that process. We are awaiting advice from the Attorney General on a more enhanced CPO process, again around that private side. The Department of Justice and Equality is leading on reform of our CPO law more generally based on the recommendations of the Law Reform Commission.
I refer to land debt. We did this previously with the first phase of the land aggregation scheme, or LAGS. Deputy O'Dowd might not know that we have written to Louth County Council specifically on the land debt issues it faces to see what we can to do ensure they do not impact on its ability to deliver housing. We have problems in some local authorities where the land that is subject to debt and repayments with interest is not suitable for housing, which is a tougher nut to crack.
However, we are examining potential ways in which we can look at that.
The local property tax review has been completed on our side in terms of allocations to local authorities and we are just waiting to complete the second item of work, which relates to the work we are doing with the Department of Finance. We will see houses that have been built in recent years that are not liable to the local property tax, LPT coming into that net, which will mean we will be able to increase allocations to local authorities based on new criteria that have been designed. We will announce that when we are ready to go with the second piece of the LPT.
Regarding gas boilers, €35 million has been allocated to be spent on energy efficiency this year. If Louth County Council has a particular problem regarding boilers and their replacement, it should contact us directly. We should be replacing boilers when they need to be replaced and not waiting unnecessarily for the passing of two or three weeks. In terms of budgetary limits in a year, capital ceilings and so on, that type of spending is done year on year and it is important we are not in breach of those. The replacing a few gas boilers would not involve a great deal of money and I am sure it is something that could be done. I would ask Louth County Council to contact us directly on that and Deputy O'Dowd might be able to facilitate it in that respect. I do not know why it has not contacted us if this is as much of a concern as the Deputy has made it out to be.
Regarding the rent Bill, I acknowledge the Deputy has welcomed that we are going to introduce new criminal sanctions but also administrative sanctions so that the RTB can move directly to sanction rogue landlords whom it finds to be in breach of their obligations.
On Deputy Barry's question on affordability, one of the points I was keen to stress in my opening statement - it was shorter than I would have liked just for the sake of not boring everyone with too long a statement - is that this week we have published the first two lists of sites we are moving on with in terms of affordability. We know the sites in terms of table A that are agreed in principle to be developed for affordable housing and the number of homes that can be derived from that in terms of subsidised housing schemes. We have a second table of sites we are working on with those local authorities and we have every other local authority doing an economic assessment as to how they will deliver and take advantage of the fund we have in place. More generally speaking in terms of affordability, we know that one in two first-time buyers in the 12 months up to June bought their homes for less than €250,000. We know that affordability is not an issue in every part of the country, a point to which, I believe, the Deputy alluded. That does not mean we cannot have subsidised housing schemes under the serviced sites fund being delivered in many more local authorities other than Cork and Dublin. That is why we have the second table and the reason we are asking other local authorities to do their own economic assessments.
The €50,000 figure is an average amount. Not every home on a site will require €50,000 worth of infrastructure works to be done to open up that site for delivery. What we are talking about in this context is, if a local authority has its own land and owns it, the cost of contracting a person to build a house on that site. Obviously, the local authority does not build directly in terms of having its own builders hired directly to it. What are the ancillary costs of servicing that site in terms of facilities and works, such as different types of infrastructure, for example, an entrance road, roads within the site, lighting, water and wastewater? Will a housing body be involved? More than likely it will, and there is the matter of managing aspects of that. What is the value of the land? If the land is at market value, that value and the amount that goes into servicing the site can be discounted from the final delivery price.
We have put in place certain caps to provide that the discounted price can be no more than 40% of the cost of the house. The local authority takes it equity share, which has to be repaid because this is a co-operative approach whereby the local authority and the purchaser come together to buy the house and part of the mortgage is parked in terms of the local authority having it, and that has to be repaid over time. That will then give us the price of the house in terms of what the person buying it is going to pay. It is not a case of taking account of the market value of a house in, say, Dún Laoghaire and discounting a few thousand from the price. That is not the way we are doing it. We have also put other caps in place in terms of-----
If the developer were to pass on the full value of what is covered by the serviced sites fund, SSF, it would tend on average to result in an approximate €50,000 reduction. In the case of Dublin, if the figure was €378,000 it would bring it down to €330,000. Is that the way that it works?
No. We would be discounting both the cost of servicing the site and the notional value of the land if it were private land going on the market. We would take those two figures together and discount that, but the maximum discount available is 40% of what the price might be on the market. If a house was on the market for €400,000, potentially the discount could be 40%, but that is an equity stake.
The first point I want to make was made to me by Mel Reynolds. I always give credit where it is due. This is a pretty serious matter. There is a very significant discrepancy in the local authority output figures in 2017 between what the Minister is claiming and what is in the National Oversight and Audit Commission, NOAC, report published in September 2018. This exposes a spin that is going on about output figures. According to the Minister's housing delivery for 2017, the total number of houses added to the local authority stock was 4,269 but, according to NOAC, the figure is 2,019, which is more than 50% less new local authority stock than what the Minister is claiming. The NOAC report sets out the total local authority housing stock at the beginning of, and at the end of, 2017 and one can subtract one figure from the other. How does the Minister explain this discrepancy? It is a very significant discrepancy and it has very big implications for all the Minister's targets not only for 2017 but for every year out to 2021. If the point is valid, there are some serious questions to be answered.
What seems to be at the bottom of the discrepancy, essentially, is the miscounting or double counting of sales of local authority housing, demolitions and, critically, voids. I raised this point with Brendan Kenny and he more or less acknowledged it. A void implies something that has been lying empty for ages, work is done on it and finally it is brought back into use. That is fine if it is a genuine void, but if a void is just a casual turnover, there is a big difference. I put it to the Minister that those casual turnovers are being counted in his claims for output as new local authority housing stock when they are not that. If we note the Dublin City Council targets that Brendan Kenny showed us, there are 1,000 voids roughly every year for most of the duration of the Rebuilding Ireland plan. That is preposterous because that would suggest, if we read it at face value, that there are 4,000 or 5,000 voids in the hands of Dublin City Council, but of course there are not. We noticed there are some but not that many. What we are counting are casual turnovers or vacancies. I would like that point addressed. If the additional local authority housing stock is half of what is being claimed, that needs to be admitted honestly.
Indeed, the NOAC report suggests that in 2017, in all four local authority areas in Dublin, there were only 564 additional units of housing stock. That is my first point. My second point is on the issue of price. We were out in Cherrywood. I talked to the guy from Hines. It is unusual for me to be talking to these capitalists.
Sure. I did not name anybody. He said the cost of the units Hines intends to deliver later than expected - 26 months for the first phase is a long time - was approximately €400,000 per unit. These are mostly apartments. If they are costing him €400,000, what will they cost people in the area? Whatever it is will be in excess of €400,000, which is totally unaffordable for the vast majority of people who are affected by the current housing crisis. Whether they are working people on average earnings or even those earning up to €80,000 a year, it is way beyond what they can afford. What the hell is the point of that? We have fanfare about the delivery of the biggest residential development in the State, but the vast bulk of it will be completely unaffordable. What does the Minister say about that?
I have just been struck by something I find slightly worrying. Outside the window where we were, there were trucks with lights flashing and a digger. I went down afterwards to see what it was doing. It was doing absolutely nothing. It was literally waving its arm around and moving a few stones from one place to another because nothing was actually happening on the site. This was done for the optics of the cameras. They have been sitting on that site for years and we now discover the latest date they are giving us is 26 months. What the hell is happening here?
I thank the Deputy for the questions. We need to be very careful when we talk about numbers so that in trying to make a political charge against me, members do not end up inadvertently undermining the system we have in terms of the permanent government of civil servants and Departments. If we spend money on housing and give numbers on houses delivered through a build programme, those numbers are not verified just by the actual houses built but through a whole system of accounting that goes before the Accounting Officer and the different reporting he has to do. There are checks and balances with the Department of Public Expenditure and Reform and everyone else. We have to be careful in making political charges against each other about how we define voids that we do not inadvertently target the system that supports all of us in delivering public services for the public good.
What bothers me with some commentators, whom I will not name but who are fully aware that we have a number of different streams to increase the stock of social housing, is that they cherry-pick certain numbers or streams, compare them with others and state that something does not add up to create confusion. We have invited different commentators and economists who are working publicly in the area to the Department on numerous occasions to explain Rebuilding Ireland and the different delivery streams we have, but some continue to do that. They continue to measure only local authority builds against our social housing stock increases or our social housing builds, which include other streams of delivery. It is more prudent to spread out our streams of delivery for social housing, because should we then come into difficulty, we will not then have no social houses being built. That is the approach we have taken under Rebuilding Ireland to protect the delivery of social housing from future shocks.
I met the new chair of NOAC yesterday to go through a number of issues around the commission. It is a new body, albeit four years old now, and there is a great deal more it can do to give people greater faith and trust around what is happening around local spending. We often hear about how a local authority may have defaulted with Revenue. People ask how that can have happened. To have those things aired at national level is a matter in respect of which NOAC has a great role to play. It can tell people what is actually happening there so that they can continue to have faith in their local authorities. However, the NOAC report does not count the increase in stock delivered through housing bodies which are working with us to use public money to increase the stock of social housing. It does not include houses delivered through the Part V process which are homes we then get into the stock of social housing. These are social housing homes. It used to be that Part V was the only delivery mechanism we had but now we have many more, thankfully.
When we publish our numbers under Rebuilding Ireland, it is the State and the Government of Ireland producing those numbers. It would be a different thing if the Minister was getting a number and requiring the number to be doubled or changing the press release to include another number. While I know that political charge is not being made against me, when we count the numbers and publish our information in the Department, we are very clear to ensure we publish accurate information on what is spent and what is delivered in social housing stock. In any event, that is the difference between what NOAC has and what we publish. There is a difference and people should point it out when they are talking about it publicly. If a so-called expert on housing is discussing the stock of social housing, he or she should point out what he or she is not counting and be fair about what is actually being done and the progress being made under Rebuilding Ireland. Of course, not everything is moving in the right direction. The number of people in emergency accommodation tells us that. When we look at the repair and leasing scheme numbers, it tells us that. I have numbers from a previous question I can provide in a moment.
Voids are not being double counted. They are not allowed to be in the funding line we have. We are not talking about casual vacancies. We are talking about houses that need upwards of €30,000 to get them back into use. Unfortunately, there was something of a perverse incentive regarding a long-term vacancy versus a short-term vacancy when it came to social housing. There was a fear that some local authorities would allow a house to be vacant longer than it should have been to get more funding. We do not want that happening. As we get these voids back into use, funding will go towards maintaining the stock. It is happening now as we move towards the end of Rebuilding Ireland over the next two years. Funding will go towards ensuring that casual vacancies are short-term and that it does not take forever to let the house again. In any event, voids are not double counted and they cannot be under the programme. We separate voids from our delivery. I wanted to ensure that when we referred to more than 4,000 homes in the social housing stock this year, it did not include voids. When we talk about more than 6,000 next year, that will not include voids. That is important in terms of transparency, accountability and everyone knowing exactly what we are delivering and trying to deliver.
Cherrywood is fantastic. What will happen there is that more than 23,000 people will come to live in Cherrywood in more than 9,000 homes. This is a new town. It is huge. It is incorrect to say that nothing is happening there. Look at all the roads. Look at the Luas going through and the council going through with water services, wastewater infrastructure, lighting, sports pitches and tennis courts. Now, they are ready to build. They have got commencement and are going on site and building. It is important that they will build. The cost of delivering apartments is high due to the amount of money spent on the excellent infrastructure to serve the communities there. They are going for the build-to-rent model which is different from the cost of owning and buying. We need more build-to-rent as it is important. The standards for apartments are better, which means they are more expensive. However, we have worked to help cut costs so that, in an area like Cherrywood, the default will be no car parking spaces for an apartment block or just a few to cater for visitors or those people with a permanent need for a car. When there are five Luas stops through Cherrywood and the Dublin Bus network going across the site, there is great transport infrastructure and we do not need car parking spaces.
The new build-to-rent guidelines will also help to drive down costs for future planning applications which come forward. Of the housing delivered, 10% will be social and we have an affordability dividend coming from LIHAF. In everything we do, the fundamental thing is the delivery of supply. If new homes are not being built, there is no point talking about how much they will cost to buy or rent or what percentage is social.
We need to make sure we are catering for everyone's housing need.
If the Deputy considers the approximately 25,000 homes that will be built next year - the Central Bank thinks it will be more like 24,000, but we will know at the end of next year - at least 6,000 will be social housing homes. The remainder will be new homes for families throughout the country, which will all be bought. Some, but not all, will be bought at very high prices because people can afford to buy at such a price level. In the 12 months up to June, one in two first-time buyers bought their houses for less than €250,000. In parts of the country affordability is not an issue. Residential construction is now driving the growth in commercial construction. We are also seeing the slowest pace of house price increases in the past two years. These aspects of Rebuilding Ireland are working and helping people.
Will the Minister fill us in in more detail on Shanganagh Castle? I will make one simple request, which the Minister committed to previously, that is, to bring all the stakeholders and parties together early in the new year. It is important that it happens. It is the desire of the elected members of Dún Laoghaire-Rathdown County Council. It is a commitment the Minister gave on the record to Deputy Boyd Barrett. The Government has three Deputies in that constituency, which is a remarkable achievement, and they are clearly very committed to it too. For a whole range of reasons it is important the Minister's staff, Philomena Poole, the chief executive of Dún Laoghaire-Rathdown County Council, her staff and the elected members are all on track with the same message. We hear the same story and the same responses. We should rule out the possibility that we will not have a house on the site until 2022. It is totally unacceptable. We need construction in 2019. Perhaps the Minister will flesh that issue out and give us a commitment to meet all the stakeholders early in January.
I will respond to Senator Boyhan's point first. It is absolutely no problem. I want people to be assured that work has continued. It is not that nothing is happening. The NDFA has been working with the local authority to try to get the financial model right. I had my staff out there again today to see what further work can be done. I raised it with the representatives of the European Investment Bank, EIB, when they were in Dublin last week at a conference. It is absolutely a priority as far as the Department is concerned. A delivery board is in place. Perhaps the meeting should be with the delivery board. We can do it in January. It is not a problem at all.
This is what delivers. We are for housing in the Department of Housing, Planning and Local Government. We want to make sure there are no unnecessary delays or blockages. We also want to make sure we get it right. We do not want this to proceed through the various stages and processes and fail at the last minute because the financial modelling was rushed. Much has been done. The NDFA is the expert on this. If it was as simple as saying the numbers work, it would have happened by now, so obviously there is a problem with the financial modelling that still needs to be resolved.
I will return to the questions by Deputy Ó Broin that I did not get to respond to. On the constitutional right to housing, not putting a right to housing into the Constitution will not get in the way of us building houses. It will not get in the way of us completing Rebuilding Ireland. It will not get in the way of us moving to the national development plan part of Project Ireland 2040. It will not get in the way of the commitment that one in five homes built will go to the social housing stock or all the many important things we need to do around affordability that can be delivered now because we have specific funding lines. We now have the first agreed-in-principle site under the serviced sites fund. We understand that but it is important for the public to understand that the fact there is not a constitutional right to housing or legislation that provides for a right to housing is not stopping us from delivering. The delivery of supply is ramping up quite dramatically.
As to whether there needs to be protection in the Constitution, the process is being handled by a separate committee looking at socio-economic rights and how we achieve that balance in society. Is it through constitutional amendment or legislation? People have different views on this. I heard Deputy O'Dowd on the radio with Eamon Delaney from the Hibernia Forum debating the role of the Constitution and what it is meant to enshrine. In recent conversations I have had with some people on a referendum on the public ownership of water, it has moved in part from being a debate on whether it should be in the Constitution to a debate about which part of the Constitution because, it is said, certain parts are stronger than others. I spoke to the Attorney General about it. It is nonsense. The Constitution is the Constitution. The Constitution is not the appropriate place in which to enshrine every law or right. We need to come to an understanding at some point about the role of the Constitution as we go through this transformative stage of our history where so much positive change is happening. The Constitution is the vehicle for that change.
I am open-minded about whether we need to put a right to housing into the Constitution. I cannot speak for the Taoiseach but I think he is also open-minded. The Government is not set in a direction on this. We are engaged in a process that has done the public good in terms of marriage equality and repealing the eighth amendment. We will continue with that process of Oireachtas committee engagement and coming to a determination of the next step in this public debate we are having. To return to my previous point, it is not getting in the way of delivery. If I felt it was getting in the way of delivery, we would be having a separate conversation. If I felt the lack of a law was getting in the way of delivery, we would be having a separate conversation about constitutional rights.
A question was asked about the Residential Tenancies Board and the powers coming under the legislation that is now published. We have allowed for two tracks and it will be up to the RTB to decide the appropriate one. We will be addressing it on Second Stage but I will go through very quickly how it is envisaged from some notes I made on the sanctioning regime before Second Stage. A complaint will be made or discovered by the RTB and an inspector will be appointed to investigate the complaint. As part of the inspection process, the landlord will have a right to make his or her views known about what he or she thinks of the complaint. There will be an independent panel of decision-makers appointed by the RTB and the report will go to a person on the panel. They will be referred to as decision-makers in the legislation. They will then make a decision as to what the sanction should be. It will go to the RTB board for a decision and it will formally issue the decision but the decision will be made by the decision-maker following a recommendation by the inspector. The landlord either accepts it or challenges it.
The decision-maker will effectively be able to decide, because we are allowing for new criminal offences, whether it warrants criminal pursuit of the landlord through the courts because he or she has breached one of these new offences of not co-operating with an inspection, not adhering to the rent pressure zone, not registering the tenancy or getting around the RPZ by using the substantial change provision in the wrong way. If it goes through the administrative civil sanction route, which is also provided for in the legislation, which is a fine of up to €15,000, the recovery of costs up to €15,000 and the publishing of the person's name on the website or in the newspapers, it will be up to the decision-maker to decide and then for the RTB to sanction the preferred route. We have allowed for both to make sure we are really giving a new power to the RTB and that we are cutting out any unnecessary time delays by allowing for an administrative sanction.
From time to time we see rogue landlords - they should not be called landlords - doing despicable things and, effectively, breaching people's human rights. We are telling the RTB that, if the breach is so severe and if it is that level of injustice, it can go the criminal route if it thinks it should try to get a prison sentence. We have allowed for both in the legislation under the new RTB Bill, which has been published. If we all have agreement on the proposed way forward, and I think we do from pre-legislative scrutiny and other things that have happened, we can move very quickly through the House if the committee schedules it.
Deputy Ó Broin talked about the assessment of Rebuilding Ireland. It has been completed. I got a couple of people independent from the Department to come into the Department to do some work on that and see if the home loan could be improved.
It is important to say that not all of the applications received were valid. Of the 2,850 assessed applications, which were the valid ones, 1,452 have been recommended for approval by the Housing Agency, so it is 51% or half. It then falls to the credit committee in the local authority to say yes or no about the loan. The total drawdown of loans to date is €47.6 million from the €200 million tranche. It is almost 25%. The scheme was only opened in February of this year. Anyone who has been through the mortgage process knows that it does take time to find the house one wants to buy, to get to sale agreed and to get through the process. The expected end of year drawdown is approaching €92.1 million. That is based on what we have in our tables in terms of the information that is coming in. We all know how popular a product this is, as people want to get a fixed-interest mortgage over the lifetime of the loan. I do not know if Deputy O'Brien has met anyone who has been fortunate enough to avail of it.
Of course. What we are trying to do with the assessment now is to see how we can improve it and if there are other criteria that would allow us to widen it a little bit to include more people. That work is ongoing, but it does involve engagement with the Department of Public Expenditure and Reform as it does not fall solely to my Department.
I know people were worried about the loan initially and whether it would provide for the type of progress that we need, but when we think about how long it takes to buy a house when we look at the drawdowns that are now happening, it shows the scheme is working well.
The next set of questions from Deputy Ó Broin related to the repair and lease scheme.
I am not going to be talking to myself, not in front of the committee anyway. We have had 1,000 applications for the repair and leasing scheme, RLS, as of quarter 3 of this year. One hundred agreements for lease have been signed. To date, we have had 39 solely in 2018. We know the delivery in 2017 was poor, with nine. We have 100 leased and we are working through another 100 applications. The vacant housing offices are prioritising the scheme. It is a good concept but the more I look at the individual projects that come under the repair and leasing scheme, the more I realise the circumstances are unique. A person needs to own a second home that he or she is not using, it needs to be in a state of disrepair, and the person must not have the funds to bring it back into use, or not want to use the funds in that way. That person must be willing to give over the house for use as social housing and there needs to be a social housing need in the area. While we need to have it in our armoury in terms of getting vacant properties back into use, it may not be what we thought it was going to be initially. We are seeing greater progress in the system with the repair and leasing scheme. What we have seen is more take-up in terms of the buy and renew scheme instead. People engage with the RLS and then they get involved in the buy and renew scheme because that appears to be a better option. The scheme is working better and we will continue to drive it.
AHBs and reclassification was another point Deputy O'Brien raised. This came up at the EIB conference that was held in the Central Bank last week. We had a large housing body from Scotland there. It is bigger than any of our tier 3 bodies. It might be as big as our three tier 3 bodies combined. Reclassification was addressed in terms of how it affected the UK. We have had a ruling on some - not all - of the larger housing bodies, and we are working through that. One of the things I wanted to do was to have that led by the Department of Finance to make it clear to the industry that this is an accounting issue rather than a delivery issue and it will not impact on delivery. The committee continues to do its work and to engage with EUROSTAT and the Commission. I have raised it in each of my engagements with the EIB because as we look to new lending streams from it, classification is important in terms of whether it is on-balance sheet, off-balance sheet or state aid. While the EIB is not the classification body of the EU, it has good expertise in this area. We will continue to examine the issue to ensure that we can work to it without it impacting on delivery. It will not impact on delivery. The important thing is that the lead body for housing bodies has also given a commitment that it will do what it needs to do to make sure that classification issues do not impact upon delivery from its point of view in the raising of finance and other such areas. We will progress the matter in tandem with progressing the Bill next year in terms of trying to come to a more certain outcome. Sometimes these engagements with the Commission take time and that can be in our interest in terms of what we are doing right now on the ground.
One of the indications of that is that not all of the tier 3 bodies were told they would have to go on-balance sheet. It shows that there are ways around this that may be able to be addressed in the regulation Bill that is coming through. We continue to look at that to see what can be done in that regard. We will continue to fight that good fight. The most important message for the housing bodies is that they have a delivery stream under Rebuilding Ireland and we are determined to make sure that they deliver it, which they will. The classification issue, which is related to accounting is not going to get in the way.
The rapid build housing programme has not been shelved. It is a very unfortunate name. What we are talking about is prefabricated housing off site so that when it gets on site, the on-site piece of housing delivery happens much more quickly. It does not mean that we are short-circuiting planning, architectural design, the procurement process, or approval processes for money from the Department.
I beg your pardon, Chairman. I am sorry. The programme has not been shelved but the delays we are seeing are not necessarily at the on-site side. Some of the delays are in getting local authorities to use the delivery method. I hope the new procurement framework being pioneered by Dublin City Council on volumetric modular housing will open the way for other local authorities to use it as well. We are seeing significant interest from private companies. Companies have come to me saying that if I could give them a contract, they would open a factory off the M50 and start producing thousands of products. There are two problems in that regard. I cannot do that because of procurement law. I have sought to address the issue, but I have not been allowed to do it. The EU law in this area is incredibly tight. We cannot break procurement law even though we have a homelessness crisis and we know we need to ramp up the delivery of housing. Even if I could break procurement law, we would still have to go through the proper planning process and make sure that what we are doing is being built in the right place, to the right specifications and will not lead to us asking in 30 years why we did that, as we face a future crisis. We are trying to protect ourselves from future crises.
To return to the reclassification issue concerning housing bodies, I think one other country that might have been restricted in the same way has either said publicly it will or is considering pursuing this through the European Court of Justice, ECJ, which would have a pause effect on aspects of classification. I know we want clarity but sometimes a lack of clarity can be helpful in terms of driving delivery and getting things done. We will continue to be mindful of our obligations to deal with the classification issue while we bring forward the regulation Bill next year and while we continue to drive the delivery of housing bodies. I think I have addressed all of the outstanding questions.
I wish to focus on the social housing output report. On the basis of the figures the Minister has given us, only 35% of the new builds have been delivered as of quarter 3, which means 65% remain to be delivered in the final quarter. That is very worrying. I know we will not know the final output until the end of the year but to have to deliver or complete 65% of the target in three months seems a very big ask. How reassured is the Minister at this stage that he will come back to us in January or early February with 100% delivery on the new builds?
I wish to pick up on something Deputy Boyd Barrett said. When Mr. Brendan Kenny was before the committee, he made it very clear that he does not count the expensive casual vacancies as voids. The Minister can check the transcript. Will the Minister consider taking them out of the output report? It is very helpful that he counts them separately and I accept the legitimacy of doing that, but they are not additions to the stock anymore. They were at an earlier stage in the programme but that is no longer the case.
I am not challenging anybody, but I wish to point out that the void programme has changed. Although it is useful to have the figure, it should not be in the output report.
On the RTB, again, the information the Minister has provided is helpful. Will the proposed legislation which members have not yet seen give the RTB the power to impose fines on landlords in breach of rent reviews and rent pressure zones without having to go to the courts? Will it be able to issue a civil sanction such as a fine? I urge caution in regard to the level of referrals to the board. The RTB used to have approximately 88 board meetings a year because of the volume of board decisions. That has been dramatically reduced, which has made it more efficient, so I have a concern regarding the level of referrals.
On cost rental, one of my concerns is that we do not now what will be the starting rents. We have been told that for the properties on Enniskerry Road it may be approximately 80% of market rate. Part of the financing problem is that if a person has an EIB loan, for example, or a private sector loan over 25 years, and he or she wants to pay down that loan and cover the cost of the management and maintenance of the unit, the start-off rent must be quite high. If that person was able to combine an EIB loan over a 25 year period with a capital advance loan facility from the State for ten years thereafter, for example, the start-off rent could be significantly reduced. I recently tabled a parliamentary question to the Minister asking whether he would be willing to consider amending the capital amounts loan facility arrangements to allow such a loan under conditions similar to those currently in place, involving 30% of the loan value, and for that to be paid down after the EIB loan. That would bring starting rents down from more than €1,000 to closer to €700 or €800, which would be eminently more affordable. I expected that to have been considered in the budget and I ask the Minister to look at it again.
On the serviced sites fund, I am a little confused by the report provided to the committee. Most members thought the serviced sites fund was to be based on the Ó Cualann model such that there would be no reference to market prices and a deduction but, rather, would involve discounting the cost of land and site servicing for the local authority and selling the property at close to the economic cost of its production. The report indicates that the serviced sites fund is more akin to the local infrastructure housing activation fund. I ask the Minister to provide more detail in that regard.
On home loans and to pick up on a point made by Deputy Darragh O'Brien, 2,222 loans were underwritten as of the end of September, 1,134 of which were approved. My understanding is that the figures indicate a drawdown on approximately 200 of the loans by the end of September. It is still within the first year of the scheme and we must be cautious about drawing conclusions, but it is a cause for concern that there have been more than 2,000 indicative approvals and 1,000 formal approvals but only 200 drawdowns. Will the Minister give any indication as to why there has been a drawdown of less than 10% of those eligible to apply and approximately 20% of those approved?
I thank the Minister for the commitment he has given to publish the criteria for the affordable housing scheme next week. That is long overdue. Anyone watching these proceedings or familiar with the previous meetings of the committee will be conscious that addressing homelessness is one of our key objectives, along with the acceleration of social housing, building more homes, improving the rental sector and utilising existing housing.
Point 5.16 in the report circulated to the committee by the Minister discusses a pilot scheme of six local authorities. It states that the scheme has been completed, but according to the Department commentary it has not. Rather, the Department is awaiting a pilot scheme of six local authorities. I ask the Minister to provide further detail on the pilot scheme. There are many local authorities. The objective was to ensure that an action plan for vacant homes would be put in place across all local authorities. I acknowledge that the Minister does not have time to go into the matter today, but I ask that he provide further detail on the pilot scheme to the committee in the coming days.
The committee has repeatedly requested that all circulars issued by the Department be forwarded to us. As I understand it, correspondence again issued to the Minister last week or the week before in that regard. The more we are informed of what is going on, the better placed we are to deal with it. There is an information deficit. We have requested on two or three occasions that the Department provide us with the circulars. I ask the Minister, as head of the Department, to ensure the Department formally responds to that correspondence, if it has not already done so, and to give a commitment that the circulars will be forwarded to us.
That is great. I think the process is under way. We have asked to be provided with them. On the local authority assessment of affordable housing, the Minister does not need to be told that affordability is a major issue in most local authorities. It is certainly so in the four Dublin local authorities as well as in Galway and Limerick. Is the Minister still awaiting assessments? He has been in this business for long enough to know that he does not need a document telling him about the assessment of affordability. Is this a delaying tactic? What is the reason for the delay? What is the current status of the four Dublin local authorities in regard to reporting on the assessment of affordable accommodation? If the Minister does not have that information, why has it not been provided to him? I have spoken to members of each of the four local authorities and they cannot understand the insistence on the production of this report when the Minister and everyone in his Department knows there is an affordability issue. If that is a process which the Minister wants completed and he wants those boxes ticked, what progress has been made in that regard?
On HAP, the figures for this year indicate that 4,506 homes were made available through construction, voids coming back or acquisition or leasing, while 14,275 were made available through HAP. The overreliance on the private rental sector remains a serious concern for me. I understand that we have to keep those tenancies going and that is why we agreed to the additional funding in the budget, but it is not a long-term housing solution for families.
The Rebuilding Ireland affordable loan scheme is a good model and product. I urge the Minister to speed up the review. I have submitted evidence from across the country regarding greatly differing criteria being used for underwriting, particularly in regard to the financial side and whether overtime and bonuses are taken into account as income, for example. The process must be streamlined. I am aware it is a new scheme, so I will not challenge the Minister on the figures. I am glad that it is increasing. It is a good product. Having worked in financial services and being very familiar with mortgages, I consider the refusal rate of 50% to be very high. The figure for invalidated or incomplete applications should be separated from that for applications refused on a financial underwriting basis.
Will the €2 million discretionary cap for social house building by local authorities, which was raised to €6 million in the budget on the insistence of Fianna Fáil in an effort to give more autonomy to local authorities, come into force on 1 January? Has the Department been in contact with local authorities to advise them of that? One of the reasons Fianna Fáil sought that measure was to try to move away from the 59 week process as much as possible and to allow local authorities to build developments of 30 to 40 units through a one-stage process. It has been broadly welcomed by several of the chief executives to whom I have spoken on the matter. Will it be ready to go from 1 January?
I did not address credit union funds in my first round of questioning. I have raised the issue several times with the Minister and the Minister of State, Deputy English, in priority questions in the Dáil. The credit unions have a first tranche of €750 million to invest in social and-or affordable housing. It has been approved by the Central Bank as a vehicle for investment since 1 February 2018 but the special purpose vehicle, SPV, has not been established. The answer provided to me by the Minister of State, Deputy English, some weeks ago in the Dáil was incorrect. I have since gone back to the credit union sector, which confirmed that the SPV model has not been set up and that it is not investing in social or affordable housing. This is a significant opportunity to utilise new funds in that sector to deliver homes. There is nothing better in terms of credit union investment than investing in homes in their local communities. What is happening in that regard? Does the Department of Finance not want the scheme to go ahead? When will the SPV be set up such that credit unions can invest in social and affordable housing?
I am not interested in making political or other charges for the sake of it. Rather, I am interested in getting to the facts. I am aware there are many different streams, but that does not answer the question I asked. What is the real addition to the local authority housing stock? The Minister has an obligation to tell us that. I acknowledge that that is only one stream. The NOAC report indicates that the additional local authority housing stock for 2017 was 2,019 and that 564 homes were added to the stock in Dublin. That is substantially less than the additional stock suggested by the figures for 2017 presented by the Minister specifically in regard to local authorities.
I would like an answer to that question. When stock is demolished and then rebuilt, if what is built is less than what was demolished, there is a net reduction. Crucially, the big issue is voids, the way they are defined long term versus short term and that what are, in effect, casual vacancies are being counted as additional stock. That is my explanation, but there is definitely a discrepancy in the figures. The Minister might not be able to answer that question now but I would like an answer to it as it is an important issue.
The Minister gave some additional figures for HAP, namely 13,741 tenancies at the end of quarter 3. Could he tell us, and these should be included in all the figures, how many landlords pulled out of the HAP scheme in the same period? We need to know how secure or insecure HAP tenancies are because certainly, anecdotally, we meet many people who find themselves back in emergency accommodation or back in trouble even though they got a HAP tenancy previously.
On the issue of affordability, the Minister did not answer my question. The biggest residential development in the State is not unimportant. We are being told €400,000 is just the figure it costs to build by the developer. I do not see how that really helps us resolve the problem. The Minister can say the answer is supply but supply at that price does not help. The prices are not coming down. I met young people who were living in the Ires Reit units in Sandyford where Ires Reit tried to put up the rent by about 40%. The rents were already €2,200 a month for those units and it tried to put them up to €2,800 but it stopped because of the embarrassment of the issue being raised. When I talked to the people living in those units, I heard there were five or six students or five or six IT employees working in Sandyford piled in together in a unit paying rents they could barely afford. What will happen in five years' time to those people when they have children and families? They can just about afford that level of rent if five or six people pile in together. There will be similar rents in the units in Cherrywood if they are buy-to-rent, but in five or six years' time those units will be useless for those people. The problem is one of affordability. Even on the affordable base we are going to get, it is not clear in Cherrywood, in terms of the local infrastructure housing activation fund, LIHAF for all the structures that we paid to put in place in terms of the infrastructure, how much actual affordable housing we will get and what affordable price we will be given, taking account of the extremely high price about which they are talking.
Regarding the impact of raising building heights, Deputy Ó Broin referred to this issue in terms of land values and so on. Has the Minister considered that by raising building heights there is the possibility that people who already have planning permissions will pull them and apply for new ones, thereby slowing down delivery because they will be able to build an extra few storeys? That is very likely to happen. Has the Minister considered the impact of that? We know there is considerable hoarding and speculating. It is very likely that raising building heights will be a trigger for that kind of activity.
I thank the Deputies for that line of questions. I will try to answer all of them, as I have taken a note of them. I will begin with Deputy Ó Broin's questions and deal with the questions in the order in which they were asked. If we note quarter 3, and the delivery on the build side, it appears we will have to do a lot of heavy lifting in the fourth quarter, but that is not to give the impression these houses have not started to be built yet and that we will have to go on-site in Q4 and get them built. We are discussing Q3 from the position in the middle of December where we have sight of what is coming through, the different stages of what is in the pipeline and what is happening on sites. We had a similar conversation last year. We delivered 60% of the build in the final quarter. Those homes were completed in the final quarter. That is the way the delivery was programmed. Even though similar concerns were raised at this point last year, we ended up being only 8% off our build target which, like any area in government, when one is only 8% off a target, is admirable. It is not 100% but we were not far off it. We have a similar stream coming online in the fourth quarter in terms of completions. Unless there is a severe weather event, which we do not see from the forecasts, standing in our way that would take people off-site between now and the end of the year, we will be very successful in terms of what we will be reporting in January. I see the increase in social housing stock but also what has been completed in terms of new builds as part of that increase in the social housing stock.
In terms of voids, I am not going to take that out of the report. We are not counting above the ceilings any more, which is important. People will know what was programmed in with respect to our voids programme as part of the delivery. We are not going to keep homes vacant that could be brought back into use under this funding line, but we are not going to count above the ceilings.
The rent Bill has not been published. My apologies, I thought it had been published yesterday evening. It takes a few days for the office to do the relevant legal stamps and so on but it will be published imminently.
Where the RTB decides to go with an administrative sanction and if the landlord accepts that, it is signed off by the Circuit Court. The RTB might deal with 30 cases at a meeting where what the deciding officer has determined is agreed, then the landlords agree that and the Circuit Court, in a private sitting, will consider those 30 cases and decide they are fine. Where that does not happen, the landlord has the right to go to the Circuit Court. We cannot take those rights away. They are enshrined in the Constitution. By giving the board these administrative sanction powers, we have short-circuited the potential delays there might be in terms of the RTB being able to do its work independently. The board has to be the one to do this. The matter has to go to the board. That was the legal advice from the Attorney General because the RTB is the enshrined office in terms of the decision making body.
I imagine they are because I do not believe anybody else other than the board can issue a fine. That was the legal advice we got back on this new level of administrative sanctions. From having read some of the files, my understanding is that the board does that.
Regarding the capital advance leasing facility, CALF and affordability, we determined in our conversations ahead of the budget that the best way to deliver affordable homes at scale and to know we are delivering them is to use our own local authority land. That is the serviced sites fund. We also believe that by doing it in this way and by using other mechanisms we can leverage European Investment Bank funding which allows us to lock-in cost rental when we talk about affordability. These are the mechanisms we have approached to deliver cost rental and to deliver affordable purchase on local authority land.
If one has an EIB loan for 25 years for cost rental units, and one has to pay down that plus the fees for management and maintenance of the properties, one's start-off rent will be at a certain point because one has to pay all the costs over 25 years. If one has a 70% EIB loan and a 30% CALF loan and one pays down the CALF loan over an additional ten years, that will give one 35 years to repay which allows one to have a lower start-off rent. The fear we all have, as with the units on Enniskerry Road, is that the start-off rents in the cost rental units will not be affordable. Could the two not be combined, as is being done with social housing, to make the cost rental unit rents affordable for average income families?
Yes, the decision is to use the EIB funding with the serviced sites fund for both affordable purchase and cost rental. That is subject to the application to the EIB being successful but we know from communications we have had to date that it is supportive of what we are trying to do. It is familiar with the models we are trying to use because it is has helped us to design them.
Regarding the serviced sites fund, I have been always very clear that we have been talking about an equity share. This would be similar to the scheme that is operated in the UK where the local authority would help take the burden of the loan to be retained by the local authority and it would be repaid over time or on the sale of the house, and that it would be an equity stake.
On the draw down of the Rebuilding Ireland home loan, the level of draw down is not necessarily a measure of the success of a financial product. Many things can happen. People can get approval and not draw down the loan because the sale falls through, they may have been gazumped or their work circumstances may change and, therefore, where they want to live changes. While it is important to understand that draw downs are happening and that, therefore, people are beginning to access this loan, it is not a very good measure of its success. We are potentially going to hit 50% draw down in the first quarter of next year. On the one-year anniversary of opening up this product we could hit 50% draw down of this product which was meant to be in place for three years, which is significant.
It is 50% draw down of the allocation, not of approved applications.
I understand the point the Deputy is making.
On Senator Boyhan's questions, I am hoping to have the criteria for the serviced sites fund new week but there are a number of issues I need to get through by the end of the year, for example, the commitments I made in regard to the land development agency, its board, the mica issue, etc. The point I was making in my opening comments was that not having the more detailed criteria with each local authority is not delaying the bringing forward of sites. These criteria become important to the man on the street at the point at which homes begin construction. We need to get the sites agreed and then get construction under way. That brings me to the point regarding local authority assessments on affordability. We have already done a first call to 11 local authorities, which are the authorities we know, without doing too much modelling, have an affordability problem. Nine have responded. As set out in the documentation, Dublin and Cork have been agreed in principle and there are further sites we need to progress. There are some local authorities that will need a proper economic appraisal, to identify vacant homes and the difference between the cost of a home on the second hand market versus the cost of a new build, notwithstanding that we need to increase delivery anyway. They need to make the numbers stack up because, again, this is about the spend of public money. We cannot just sign blank cheques. The local authorities have been asked to do this assessment, the results of which will inform our second call.
We made this call out to the Dublin local authorities during the summer. Of the 11 local authorities to which we made this call, which included the four Dublin local authorities, nine have returned their assessments and we now have first sites for approval. It is not the case that a local authority is sitting on its hands and not carrying out the assessment. It is an affordability issue. As I said, we issued that call to the four Dublin local authorities in the summer.
I do not have that table to hand. I am told three have returned them and one has not.
On the circulars, we have agreed the circulars with the committee, as clarified earlier by the Acting Chairman. On the vacancy, that has been achieved in terms of putting the teams in place as per that item. The quarter 3 report on the vacancy work was published so the committee should have that report as well.
Deputy Darragh O'Brien asked if we need to review HAP. Yes, we do but I do not propose to do so until such time as we have a sustainable supply of housing. When we reach that point we will not need HAP to the degree we need it now. If I were to withdraw it tomorrow it would not solve the problems that people have. When we get to the point that a consistent level of social housing stock is being built each year, we can then review other housing measures. There will be always a need for HAP. People will always want the flexibility it provides for a number of reasons but we should not be using it to the degree that we are now. Nevertheless, we have to use it for legacy reasons, which are clear. As we move in 2020 and on to 2021 we will be ale to put more people into social housing than through HAP. At that point, we will need to examine to what degree HAP is sustainable into the future. Now is not the point in time to do that. Deputy O'Brien and I are not on a different page but now is not the point in time to do that.
The Deputy also mentioned a review of the Rebuilding Ireland home loan. Consistency is key. Among the recommendations made to me one constantly repeated was the need for consistency in application in each local authority. At the beginning of next year we will be able to implement those recommendations, which I have separated into two tiers. The first tier, which is the easy stuff that we can commence at the beginning of next year, is work with the local authorities in terms of notifications, training rounds and so on. The second tier requires discussion with the Department of Public Expenditure and Reform, which is a more complicated process. Both are in train and I have raised aspects of them with the Minister for Finance and with the Taoiseach last week in a meeting.
On the one stage approval process, we have committed to examining the cap and we are currently doing so in conjunction with the Department of Public Expenditure and Reform.
Subject to the public spending code. Local authorities are telling members that there is a four stage approval process and it is taking them too long to process applications when they could have taken those projects through the one stage approval process but did not.
Yes. My question is if the local authorities have been advised of this change. If they are aware of it, we can beat them up in the middle of next year if they do not use it. We are giving the Minister a stick.
This issues was raised in an engagement I had with the Department of Public Expenditure and Reform about four weeks ago. There is ongoing engagement between myself, the Minister for Finance and the Taoiseach. At one of those meetings this issue was raised and an agreement was given at that time by the Department of Public Expenditure and Reform. We are almost there and hope to have something in place in January.
On credit union funding, we have changed the law. The Central Bank has changed the conditions around credit union funding. We have provided funding to allow the credit unions to explore how they put together a special purpose vehicle, SPV. We cannot force a housing body and a credit union to come together in an SPV. We also cannot set up the SPV.
The change has been made by the Central Bank and the Government has provided funding for the special purpose vehicle. We cannot force a housing body, which is not a government body, and a credit union, which also is not a government body, to come together to develop a special purpose vehicle to deliver housing. We cannot force them to do that.
I will now respond to the questions from Deputy Boyd Barrett. The National Oversight Advisory Council, NOAC, does not count housing bodies in Part V. Those are social housing homes that come into the social housing stock. People from the local authority housing lists are allocated those homes.
Yes. The increase in the stock of social housing from build through local authorities, housing bodies and Part V is 4,054. In regard to HAP, the Department provides committee members with a regular update on HAP. I am not sure if the Deputy has seen the table in that regard in the documentation.
If the Deputy submits a parliamentary question requesting it, I will provide it. This analysis relates to tenancies exiting HAP. Some 9,050 have exited HAP since it was established, of which 3,548 were tenant-led exits. The reason for this includes voluntary exit, deceased tenant, working in a different area, a change in family composition, educational reasons and anti-social behaviour in regard to a third party not living in the home. In regard to landlord exits, 2,624 landlords have exited HAP.
That has related to notice being given to a tenant, selling of a property, receivership and monthly rent increases happening. There were 1,765 exits from HAP to other forms of social housing. Some 1,113 exits have related to compliance, non-payment of rent, anti-social behaviour and such. There is a tax clearance certificate relating to property standards. Every quarter, we are getting more detailed information on HAP because we have an excellent system being run from Limerick, which we are always trying to improve. It allows us to produce these very detailed reports which the Deputy does not have because he is not a member of the committee. I apologise since I knew he would be in attendance and it would have made sense to give it to him in advance. We can and no doubt will have a more detailed discussion next time.
Okay. Prices are coming down. We are looking at single digit price inflation for house buying this year, which is important because it shows the growth in inflation. All the different indicators tell us that. In Cherrywood, the cost of building will be expensive but they are looking at the build-to-rent model which we need more of as we professionalise the landlord sector. I do not see how the Deputy cannot see 9,000 new homes for 23,000 people, a new town with sporting facilities, transport and places to work as not helping. Of course it helps. It will not help everyone but it will help. If people buy at higher prices, that frees up homes at lower prices for those who cannot afford higher prices. All delivery helps supply.
It helps because people will go to live in those homes. This will help those people to get those keys and live there. With regard to heights, not to try to start a fight at the end of the meeting, but I hope that people will not start questioning our heights policy based on local concerns.
I will come to the point Deputy Boyd Barrett was making in a second but this is an important point to make because local interests have tried to trump good planning, design and housing policy for years, and they have been successful. I said earlier that we need to be resolved as an Oireachtas that we, as politicians, will not get in the way of the densification of urban places. They are currently lovely places to live with lovely facilities and amenities but they could take more homes if we densify. Part of that relates to increasing heights.
We need to look at the optimal use for land. If we allow for more apartments to be built on that land, then it will be possible to sell more apartments and make more money. It is possible therefore that the price of land might increase. It is also more expensive to build higher so more costs are incurred and the economics of that need to be considered. If we look at it purely with regard to land, we would be building one home per piece of land because that would keep the price at rock bottom. There is a need to look at an economic model of the different factors relating to land and its optimal use.
The Deputy asked a question about possible delays. We are dealing with a shortage which needs to be fixed in a sustainable way. There is no point in us building to arbitrary height caps which would see us facing much bigger challenges with prices, affordability and commuting distances 30 years in the future because we did not build enough homes in places where we could have at a time when we knew we could have if we had changed the law. If it means someone waiting for the last six months for the public consultation to finish and delaying putting in a planning application, which I understand, but it also means we will get 30% to 50% more homes on a site which will be there for the next 100 years, we have to do that now to protect ourselves in the future.
With regard to land hoarding, €300 million worth of land is liable for the vacant site levy which kicks in on 1 January 2019. That will only increase. The €300 million accounts for 140 properties but there are 300 now on the register. We need to do more work but €300 million worth of land is not a small amount. That will only rise next year because the levy is more than doubling and we have doubled the number of houses on the register to which that will apply.